But the annual rate of change turned negative for the first time in 11 years, according to the Case-Shiller index.

Nonbanks in home lending rely heavily on this type of funding and are carefully watching rules for depositories that offer it as the industry consolidates.

The agreement will allow the fraud prevention company to use this platform to access consumer account data prior to the initiation of a funds transfer.

Tuesday continued the same theme of incredibly modest movement inside an incredibly narrow range.  The average lender is still just under 7% for a conventional 30yr fixed loan, but now slightly closer to 7% compared to yesterday. Earlier this morning, rates were set to improve by just as much but economic data caused bonds to lose value.  As bond prices fall, rates rise, all other things being equal.   If it’s any consolation, at least some of the data spoke to a stronger housing market.  Home prices rose at 0.7% in April (the most recent month in the index) compared to forecasts calling for less than half as much appreciation.  New Home Sales surged to the highest levels in more than a year, easily outpacing expectations.

Both the S&P CoreLogic Case-Shiller U.S. National Home Price Index and the Federal Housing Finance Agency’s (FHFA’s) Home Price Index (HPI) show home prices continuing to increase in April although at a much-diminished rate than in the earlier low-interest rate environment. The annual rate of change for the Case-Shiller indices is now in negative territory. The Case-Shiller National Index, which covers all nine census divisions, posted a decline of 0.2 percent in April, compared to an annual gain of 0.7 percent in the previous month. Before seasonal adjustment, that index was up 1.3 percent month-over-month and rose 0.5 percent after adjustment. The 10-City Composite dropped 1.2 percent, down from the -0.7 percent annual change in March. The 20-City Composite posted a -1.7 percent year-over-year loss, down from -1.1 percent the prior month. Both city composites increased 1.7 percent month-over-month before adjustment. Afterward, the 10-City was up 1.0 percent and the 20-City 0.9 percent. Miami boasted the largest annual increase among metro areas at 5.2 percent, while Chicago broke into the top three in second with a 4.1 percent increase, and Atlanta bumped Charlotte out of third place with a 3.5 percent gain. Seventeen of 20 cities reported lower prices in the year ending April 2023 versus the year ending March 2023. Boston and San Francisco showed 0.1 percent increases and Cleveland gained 0.9 percent.

Logical Weakness After Stronger Data

Forget “love.”  Today data hurts.  Durable Goods fired a warning shot at 8:30am.  Consumer Confidence and New Home Sales finished the job at 10am.  With that, a modestly stronger start gave way to a logical sell-off of moderate proportions.  By 11:30am, the losses had run their course and bonds drifted sideways for the rest of the session–perfectly inside the prevailing range. 

Econ Data / Events

Durable Goods

1.7 vs -1.0 f’cast, 1.1 prev

Durables, nondefense, excluding aircraft

0.7 vs 0.0 f’cast

New Home Sales 

763k vs 675k f’cast, 683k prev

Consumer Confidence

109.7 vs 104.0 f’cast, 102.5 prev

Market Movement Recap

09:24 AM Decent recovery after initial morning weakness.  10yr down half a bp at 3.717.  MBS up 1 tick (.03)

10:07 AM Weaker after New Home Sales data and consumer confidence.  10yr up 2.2bps at 3.745.  MBS down nearly an eighth.

02:48 PM Flat all afternoon after AM losses.  10yr up 4.5bps at 3.768.  MBS down just over an eighth.

Forget “love.”  Today data hurts.  Durable Goods fired a warning shot at 8:30am.  Consumer Confidence and New Home Sales finished the job at 10am.  With that, a modestly stronger start has given way to a red morning.  The losses aren’t extreme and merely take bonds back into the same old range. 

Last month’s sales of newly constructed single-family homes rose to the highest level since February 2022. The report from the U.S. Census Bureau and the Department of Housing and Urban Development put the seasonally adjusted annual rate for May at 763,000 units, an increase of 12.2 percent compared to the April. That rate of 680,000 was revised down from an original estimate of 683,000 units. On a non-adjusted basis, there were 73,000 homes sold during the month, up from 60,000 in April. Analysts had expected a much smaller number. Those polled by Econoday had a consensus estimate of 667,000 while Trading Economics had a forecast of 675,000 units. The increase in sales, however, was a negative for new home inventory. At the end of the reporting period, there were 428,000 homes available for sale, down 4,000 from the prior month. This was a 6.7-month supply at the current sales pace. Only 69,000 of these units are ready for occupancy. Economist Robert Dietz of the National Association of Home Builders commented, “Demand for new homes is strengthening because of a lack of existing home inventory. There is only a 3-month’ supply of existing single-family homes on the market. New home inventory was 31 percent of total inventory in May. Historically it is typically 10 percent to 15 percent. As a result, the pace of resales is down 20 percent from a year ago , while the rate of new home sales is up 20 percent from a year ago.

Title premiums written slipped 44% on a year-over-year basis, as mortgage origination volume was down by more than half, the American Land Title Association reported.

The first and fourth-largest home insurers in the Golden State won’t issue new policies because of rising construction costs and exposure to catastrophes.